South Africa is currently caught in a cycle of blaming the symptoms rather than the disease, and it's starting to cost the country dearly. While politicians dream up new ways to punish business owners for hiring undocumented labour, the economy is quietly packing its bags and heading for the exit.

ATM President Vuyo Zungula has been making a lot of noise in the National Assembly, pushing the idea that if we just throw enough employers in jail, the employment crisis will magically vanish. He even put the screws on Home Affairs Minister Leon Schreiber for some fresh stats. The numbers Zungula pulled out show that 8,180 employers have faced charges over the last five years, while 109,735 people were arrested and deported. This so-called 'tough on crime' campaign makes for great soundbites, but it ignores why those workers were hired in the first place.

The campaign to criminalise South African employers who hire undocumented foreign workers, championed most visibly by ATM President Vuyo Zungula, proves why politicians should not be entrusted with economic decisions.

Moeletsi Mbeki, the chairperson of the South African Institute of International Affairs, didn't hold back when he weighed in on May 28. He described the current political approach as little more than 'scapegoating theatrics.' Mbeki pointed out that the obsession with migration masks a deeper, uglier reality: the state is just not good at running an economy. When you look at the numbers, they're not just bad; it's a total retreat of private capital.

The unemployment rate is a scary 32.7%, and if you include everyone who has given up looking for a job, that number jumps to 43.7%. In the first three months of this year alone, 345,000 jobs simply evaporated. Foreign direct investment isn't just slowing down; it's falling off a cliff. We went from R73.5 billion in the second quarter of 2025 to a paltry R21 billion just a few months later. That's a 70% collapse in the money coming into the country, and you don't need to be an economist to know that when the money leaves, the jobs follow.

Businesses are not hiring undocumented workers because they want to break the law for the thrill of it. They do it because they are desperate, and our current labour laws make it nearly impossible for small, struggling shops to survive. The national minimum wage was hiked by 5% in March 2026 to R30.23 an hour. While this sounds good on paper for protecting workers, it ignores the reality for a small contractor or a local restaurant operating on tiny profit margins. When a business can't afford to pay that rate while keeping the lights on, they have two choices: close down completely, or find someone who is willing to work for less.

Many households rely on help to take care of children and elders so that they can go to work themselves. When the cost of legal help is pushed beyond what a middle-class family can afford, they are left with no choice but to look for informal arrangements. This policy effectively makes it illegal for the poorest people to find any form of honest work at all.

It's a stark contrast to how other nations have built their strength. China, for instance, didn't jump straight to high minimum wages. Between 1952 and 1986, they kept wages compressed to encourage businesses to expand and industrialise. They didn't view poverty wages as a moral good, but they understood that you have to create value and grow the cake before you can start arguing about how to slice it. They only introduced a minimum wage law in 1994, once the economy was already on solid ground.

South Africa is trying to mandate a wealthy country's lifestyle on an economy that's currently struggling to keep its head above water.

National Minimum Wage: R30.23 per hour (as of March 2026). Unemployment rate: 32.7% official; 43.7% expanded definition. Job losses (Q1 2026): 345,000. Foreign Direct Investment (Q2 2025 to Q3 2025): Dropped from R73.5 billion to R21 billion. Enforcement stats (last five years): 8,180 employers charged and 109,735 undocumented workers deported.

Unless the policy starts reflecting the ground truth of our economy, those unemployment numbers are only going to head in one direction.